This section covers Excise tax processing procedures at the Cincinnati Internal Revenue Service Center (CIRSC) relevant to Excise field examinations. Additional information may be found in IRM 21.7.8, Excise Taxes.

The processing of all Excise tax returns and amended returns are centralized at Cincinnati Submission Processing Center (CSPC). CSPC also processes delinquent returns and substitutes for return (SFR) submitted by Excise Tax Field Groups. The following returns are filed and processed at CIRSC:

Excise tax claims filed on Form 8849, Claim for Refund of Excise Taxes, and Dyed Diesel Fuel Penalty Claims are received in CSPC and immediately forwarded to Centralized Excise Operations (CEO) for processing.

All original and amended Form 720-TO, Terminal Operator Report, and Form 720-CS, Carrier Summary Report that were filed on paper are also received in CSPC and forwarded to CEO for scanning and data input.

Form 4136, Credit for Federal Tax Paid on Fuel, are to be attached to the original or amended income tax returns of the claimant, and are filed with the Service Center where the claimant files his or her income tax return.

Most changes to Form 720 must be made on Form 720X, Amended Quarterly Federal Excise Tax Return. When an amended Form 720 is received by CSPC, it is processed as a duplicate return and forwarded to CEO. CEO will forward any amended Form 720 reporting a tax decrease or credit of over $5000 to a Campus Revenue Agent who will determine if a Form 720X is required. Any amended Form 720 requesting an increase or reporting a decrease of less than $5000 will be processed as filed and a Form 720X will not be required.

Claims for overpayments relating to Forms 11-C, 730, 2290, and 2290 EZ are made on Schedule 6 of Form 8849. A claim for credit for tax paid on vehicles that were destroyed or stolen or used 5,000 miles or less (7,500 miles or less for agricultural vehicles) can also be made on line 5 of Form 2290. Taxpayers frequently file a corrected version of an excise tax return by filing"Amended Return" on Form 11-C, 730, 2290, and 2290 EZ. These returns are filed in the CSPC and are treated as duplicate returns. The amended returns are then forwarded to CEO for disposition. See IRM 21.7.8 for more information on the processing of excise tax returns.

Amended returns may be accepted, not considered, disallowed, or selected for examination.

Excise tax claims filed on Form 8849 are forwarded directly to Centralized Excise Operations (CEO). Excise penalty claims filed on Form 843 are also forwarded to CEO.

Form 8849 claims are sorted by schedule and dollar amount. Based upon dollar amount of claim, they are given to either Revenue Agents or Tax Examiners for review. See IRM 21.5.3, Exhibit 2, for exam criteria. The claim may be accepted, not considered, disallowed, or selected for examination.

See IRM 4.10.8.9 and 4.24.8 for more information relating to claims examinations.

See IRM 21.7.8.4.5for more information on the processing of Form 8849 claims.

The procedures in this subsection apply to penalties assessed under:

All claims for abatement or refund of fuel penalty assessments are processed through the Cincinnati Compliance Service Center (CCSC). The taxpayer must file a Form 843, Claim for Refund and Request for Abatement. The Form 843 should be routed to:

The taxpayer does not have administrative appeal rights if the claim is disallowed. The claimant can only seek relief by filing suit in the United States District Court or the United States Court of Claims within two years of the claim disallowance letter.

The penalty assessment must be paid prior to submission of the claim by the claimant.

The Fuel Compliance Officer (FCO) Manager will review the original claim or a facsimile of the claim and advise the CEO Excise Fuel On-Line Network (ExFON) Tax Examiner of the claim determination. The FCO Manager will send the appropriate closing letter to the claimant.

The CEO ExFON Tax Examiner will make necessary adjustments to the claimant's penalty account upon the FCO Manager's reply.

TAS (Taxpayer Advocate Service) uses the Operations Assistance Request (OAR) process to refer cases that they lack either the statutory or delegated authority to resolve. If the CEO Operational Liaison Coordinator receives an OAR regarding a dyed diesel fuel penalty, the liaison will assign the case to the CEO ExFON Group. The CEO ExFON Group will contact the appropriate FCO Manager and expedite the OAR via fax or e-mail. IRM 4.13.3.1.2 provides instructions for OAR processing. Every effort must be made to expedite completion of OAR cases.

To locate a claim processed by CEO, research the appropriate Master File account module for the type of claim by using command codes SUMRY, TXMOD and/or BMFOL.

To locate a pending claim processed by CEO, research IDRS using command codes SUMRY and TXMOD.

The ten-digit employee number of the Tax Examiner assigned to the claim can be found in the Control Base and History Information Section of TXMOD.

If the claim cannot be found, research using CFOL command codes and/or command code AMDISA to determine whether the claim was selected for examination. The period of a fuel claim can be determined by using command code BMFOL with definer A. The beginning period of the claim will be in the " Amended Claims Date" field and the ending period will be in the "Correspondence Received Date" field.

CEO also updates the Control Base and History section of IDRS when claims are no considered or disallowed. The chart below lists the issue and how it is entered in the history.

All original returns selected by CEO will be established on the module to which the return is posted.

All amended Excise tax returns or claims on Form 8849 that relate to a filed Excise tax return will be established on the module to which the amendment or claim relates. The original return will accompany the claim.

See IRM 21.7.8.4.5for more information relating to Form 8849 claims.

Fuel claims can be processed on the income tax module for the claimant. If the claimant has no income tax requirements, a "substitute " income tax module may be established by using a special blocking series when inputting the Integrated Data Retrieval System (IDRS) adjustment.

Normally, claims selected for examination by CEO will be unpaid claims Source Code 30. Paid claims will use Source Code 31.

Excise groups may review IDRS to determine whether selected claims have been paid by researching the modules. See IRM 4.24.11.6.

CEO will forward claims and returns to Excise Field Groups after AIMS Controls are fully established on IDRS.

Excise Field Examiners should research AMDISA for any additional claims in transit from CEO prior to closing their examination.

For non-fuel claims, filed by a claimant who is not the Form 720 filer for the excise tax claimed, see IRM 21.7.8.4.5.7.9.

Every attempt should be made to control field inventory on Master File AIMS. If AIMS control is established on Non-Master File AIMS, any resulting adjustments and closing for third party fuel claims should be done on AIMS Master File IDRS.

Excise tax returns or claims selected for examination should be closed through Centralized Case Processing (CCP) Operations located at CCSC.

See IRM 4.4.10, AIMS Processing Handbook.

The CCP web page can be found at http://sbse.web.irs.gov/CCP/Exam/Exam.htm .

CSPC processes all delinquent returns and substitutes for returns (SFR) submitted. Procedures found in IRM 4.4.9, AIMS Processing Handbook, are also applicable.

These refund claims are made by the taxpayer on Form 720X.

Under treaties between the United States and certain foreign countries the policies issued by an insurer or reinsurer that is a resident of any such country may be exempt from the tax imposed by IRC 4371. Each treaty must be researched to determine the validity of the claim.

The claim must identify the foreign insurer or reinsurer, the treaty country, the taxable period for which the claim is being made, the amount claimed and the person on whose behalf such amount is being claimed.

There must be submitted with the claim a certification by the taxing authority of the treaty country that the foreign insurer or reinsurer was a resident of the treaty country for the period for which the claim is being made. Such certification may be in the form of a list compiled by the taxing authority of the treaty country of all insurers or re-insurers that were residents.

In addition, if the treaty permits an exemption only to the extent that the foreign insurer or reinsurer does not reinsure the risks covered by a policy with a person that would not be entitled to an exemption from the tax on such policy (such as the treaty with France), there must be submitted with the claim a certificate signed under penalties of perjury for each policy stating:

Prior to the allowance of the claim, the person that filed the claim for refund must execute and submit a closing agreement Form 906, Closing Agreement as to Final Determination Covering Specific Matters. The closing agreement must be executed by the foreign insurer or reinsurer. It must also contain the following statements:

If the insured is not the person that remitted the tax, and if any amount claimed was added to the premium paid by the insured, the closing agreement must also be executed by the insured.

The following signed statements should appear on Form 906:

The IRS Service Center will forward the claim for refund and Form 906 to the appropriate Territory Manager for signature.

The Territory Manager should sign the Form 906 after ensuring that the required statement(s) have been signed by the appropriate parties.

It is not necessary to review or audit the claim for refund for accuracy or completeness at the time of signing. The claim for refund and the signed Form 906 should be returned to the Cincinnati Service Center for processing.

CEO Revenue Agents review unpaid claims per IRM 21.7.8.3.2.

All unpaid claims meeting mandatory select criteria are selected by CEO Revenue Agents and forwarded to Excise Field Groups. See IRM Exhibit 21.5.3-2 for mandatory select criteria.

CEO Revenue Agents may also select discretionary claims to the Excise Field groups.

CEO Revenue Agents should use tracking code 7734 for mandatory selects and 7735 for non mandatory selects.